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Online retailer Amazon has received EUR 250 millions in illegal state aid from Luxembourg, the European Commission said today. This is the fifth high-profile decision on tax deals, like the one between the Irish government and Apple.

“Governments are letting big business off the hook when it comes to paying the billions they owe in tax. This is unsustainable and unfair as taxes are required to fund public services like education and healthcare. When large companies, such as Amazon, don’t pay their fair share of tax, small businesses and citizens end up unjustly footing their bill.

“Some EU governments have secretive tax deals with multinationals and this needs to stop. Governments are meant to represent the interests of their citizens and not only those of corporations. It is also disappointing to see that the Irish government continues to delay collecting the billions in unpaid tax from Apple after their tax deal was exposed last year.

“Only tax transparency will allow citizens to hold decision-makers to account, expose companies’ potential wrong-doing and fix the tax system. In July, the European Parliament voted for rules for multinationals to automatically disclose where they generate their profits and where they pay their taxes. These should now swiftly be adopted.”

Notes to editors:

The European Commission launched its investigation into the tax schemes operated by Amazon in Luxembourg in October 2014. The company received significant tax reductions by the way of ‘tax rulings’ issued by Luxembourg authorities since 2003. The European Commission has also opened investigations into Luxembourg’s tax dealings with McDonald’s in December 2015, and with ENGIE in September 2016.

The decision on Amazon follows earlier Commission decisions on tax deals of by Ireland with Apple in September 2016 as well as the Netherlands with Starbucks and Luxembourg with Fiat in October 2015. In January 2016, the European Commission has also declared illegal selective tax advantages granted by Belgium under its "excess profit" tax scheme, which has benefitted at least 35 multinational companies.

According to the European Commission, tax rulings may involve state aid within the meaning of EU rules if they are used to provide selective advantages to a specific company or group of companies.

In December 2015, the EU adopted a directive aimed at improving the exchange of information on tax rulings given by member states to companies on advance cross-border tax rulings, as well as advance pricing arrangements. However, the public will not be allowed to access this information.

Oxfam America has published the report “Rigged Reform” in April, which exposes how the US’s 50 largest corporations relied on an opaque and secretive network of subsidiaries in tax havens to avoid paying their fair share of taxes.

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